Deal would extend Adnoc L&S offshore footprint into North Sea, U.S.
Adnoc Logistics & Services, the logistics arm of the United Arab Emirates’ oil-and-gas giant Abu Dhabi National Oil, is in talks to acquire a big stake in HEA Energy, a deal that would value the Middle Eastern-based energy marine services company at up to $3 billion, according to people familiar with the matter.
The talks involve Adnoc Logistics & Services, a unit of Abu Dhabi National Oil, taking either a large minority or controlling stake in HEA, the people said. The discussions are advancing but could still fail to turn into a deal, the people familiar said.
According to the Journal, Adnoc L&S is ‘flush with cash.’ Charter rates in its shipping business surged this year, the paper reports, when conflict in Iran bottled up the Persian Gulf and made it costlier to get oil out of the region. Adnoc L&S quadrupled its net profit in the second quarter to $917 million from the same period a year earlier.
Adnoc is seeking to boost oil and gas production after the UAE broke away earlier this year from OPEC, the price-setting oil cartel. The Journal reports that move has given state-owned Adnoc more freedom to make investments to boost output and to ‘establish itself more prominently as an energy superpower.’ In August, Adnoc’s gas-production business said it would invest more than $8 billion to increase capacity.
An ownership stake in closely held HEA would bolster the UAE’s footprint in offshore oil and gas services, extending Adnoc L&S’s reach geographically, including in the North Sea and the U.S.
Founded in 2022 and based in Abu Dhabi, HEA operates a network of so-called jack-up barges — floating platforms used to support offshore wind farms and oil-and-gas maintenance activity. HEA also provides accommodation vessels to house oil and gas workers, and battery-powered subsea vessels.
HEA generated operating income of $65.2 million in the first six months of the year, up 128% from the year-ago period, while revenue more than doubled to about $100 million, according to the company’s website.
The Journal reports the UAE has been ‘aggressive’ in shipping oil out of the Persian Gulf despite Iran’s drone and missile attacks. Adnoc has provided “shuttle run” services, ferrying oil in tankers from inside the Gulf to just outside the Strait of Hormuz, where it is delivered to customers.
In August, Adnoc L&S said it acquired 11 vessels — five to carry gas and six to transport crude oil — for a total of about $1.3 billion, expanding its ability to ship energy. Publicly traded in Abu Dhabi, Adnoc L&S has a market value of more than $15 billion. It is about 80% owned by Adnoc, its state-owned parent.
Adnoc L&S supports offshore drilling projects and operates more than 100 ships used to transport crude oil, liquefied natural gas and refined products globally.